A confluence of events sees emerging developer VHM Limited poised to deliver its globally-significant Goschen critical minerals project at the right moment in history.

Demand for critical minerals is set to soar as the global energy transition gains pace and Goschen represents a significant source of the rare earths needed for both decarbonisation and defence applications.

Importantly, the project also has low capital intensity, a low environmental impact and represents just one part of a critical minerals province identified in north-west Victoria by VHM, executive director and CEO Ron Douglas explains.

"It's a great asset, ready to go, and the world needs it," he said.

"Goschen's moment in the sun is now."

Goschen is one of the world's largest rare earths deposits and has an additional world-class mineral sands resource, set to support a plus-20 year mine life.

VHM has a 210 million tonne ore reserve containing neodymium, praseodymium, dysprosium, terbium, zircon and titania - crucial for manufacturing technologies required for the global energy transition.

The International Energy Agency foresees up to a fourfold increase in demand for critical minerals by 2030, under its net zero emissions by 2050 scenario.

Currently in the final stages of the approvals process, VHM is aiming to bring Goschen into production in 2025 to meet the anticipated supply crunch.

It will also offer an alternative source to Western countries looking to secure a diversified supply chain in an industry dominated by production and processing in China.

Rapid progress from first principles to near-term production

VHM has developed Goschen from a concept in 2014 to the project being granted "major project status" by the Australian government in 2021, given its national significance.

The company delivered an initial resource for Goschen in 2016 and took VHM to a successful $30 million IPO in January 2023 with a definitive feasibility study in hand.

Continued exploration has led to the discovery of the Cannie and Nowie deposits during 2023, confirmed VHM has discovered a critical minerals province spanning 55km long.

"The discovery of the critical minerals province was a company highlight of 2023, however, VHM's primary focused is on developing the high-grade Goschen project into production," Douglas said.

 

Accordingly, the board was restructured late last year to transition the company from an explorer to a producer, with plans to take accelerate Goschen to targeted first production in 2025.

Douglas was appointed along with Ian Smith and Maree Arnason, all with significant resource project development and operational experience.

"We're a junior and when you look at the alumni that sits on our board and the quality of management, it really is exceptional," Douglas said.

In the 12 months since listing, VHM has increased the resource, refreshed the DFS demonstrating strong financial returns, and secured an initial binding offtake agreement with leading rare earths and mineral sands processor, Shenghe Resources.

"This agreement between VHM and Shenghe is a strong endorsement of the world-class rare earths and mineral sands resource - and the strategic value of the Goschen project," Douglas said.

"A binding offtake arrangement for first production provides a favourable influence on the bankability for the project, and further distinguishes the staged development approach of the Goschen project as a viable, de-risked, low capital intensity project." 

The offtake agreement covers 60% of the rare earth mineral concentrate (REMC) and zircon-titania heavy mineral concentrate (HMC) products for an initial three-year term.

"That gives us the option to then look at what best works for our shareholders," Douglas said.

Big project, small footprint

The refreshed DFS focused on the initial 10 years of an expected 20-year mine life and considered 98.8 million tonnes of ore reserves, less than 50% of Goschen's identified 199Mt.

The study outlined a 2.8-year payback, pre-tax net present value of about A$1.5 billion and an internal rate of return of 44%.

Initial capex was put at $376 million [phase one], with ancillary costs of $106 million, and annual opex for phase one at $148 million.

"Economically it leaps out as it's low capex but it's also a low-impact mining operation and a relatively low environmental footprint when compared to other rare earth mining operations," Douglas said.

The deposits are sand-based and allow for a low-cost truck and shovel operation.

"The land we have purchased for the [Goschen] mine footprint was largely cleared for farming use some 100 years ago," he said.

"We'll be rehabilitating as we go," Douglas added, "putting the topsoil back on top so it's back to where it was and returning it to agricultural use."

The shallow nature of the deposits also means the mining won't intersect with the water table, which minimises the operation's environmental impacts risk.

The company owns the land required for the Goschen mine footprint and has been engaged with the community for the better part of five years.

"We have a good relationship with our primary stakeholders and have been active for several years in the local community," Douglas said.

The project enters the final stages of the EES approvals process this month, following comprehensive technical, environmental and social impact assessment studies spanning more than 3,500 pages, he said.

"We've put a lot of work into it and worked with the community, and government agencies to ensure that what we're trying to do  fits within all requirements," he said.

In the spotlight

The federal government showcased Goschen in its recent Australian Critical Minerals Prospectus as it moves to support the development of critical minerals projects, to avoid vulnerabilities from volatile prices or highly-concentrated supply chains.

The government doubled the financing available under its Critical Minerals Facility to $4 billion in November 2023, and more recently supplemented the Facility for Australian Critical minerals projects with a further $40 million1.

Government financing has included a $1.25 billion loan to Iluka Resources to develop Australia's first integrated rare earths refinery at Eneabba, and most recently an $840 million (US$550 million) contribution to Arafura Rare Earths for their rare earths mine and refinery development in central Australia.

"I think the definition that the government's put on our mineralisation being critical, and the sums they're prepared to invest to enable us to develop these industries, says: ‘this is important for our future'," Douglas said.

Goschen Phase 1 is expected to produce an average annual 9,428 tonnes of REMC and 134,500t of zircon-titania HMC.

Having both rare earths and mineral sands at Goschen further derisks the project, Douglas said.

"Mining is cyclical so it's good to have dual commodities, you can offset your risk in that way," he said.

Gaining momentum

VHM is keen to build on momentum as it moves Goschen towards production to meet the growing need for critical minerals.

"We achieved our first goal [for 2024] with the first binding offtake agreement in January," Douglas said.

"Our focus right now is on the permitting because that is such a fundamental step.

"And concurrent with that, we'll work on the financing and the debt and equity requirements to get the asset into development.

"We already have banks who are in our data room who are familiar with this product and this asset.

"So we'll make progress, with the intention to have the board approve full development later in 2024.

"It's an exciting time to be in VHM."